If you wish to enter into a self-billing agreement, you do not need to inform hmRC or obtain its approval. You must: There is no shortage of benefits to self-billing contracts. Unfortunately, the same goes for possible obstacles. As long as the customer and supplier take the necessary steps to ensure accuracy and compliance, this type of financial agreement has a significant advantage. Suppliers may be located in the United Kingdom, the European Union or countries outside the EU. Invoices cannot be issued to a supplier who has changed their VAT identification number unless a new agreement has been established. You can only recover the input tax indicated on the self-invoiced invoices if you meet all the conditions for registration. Once the agreement is confirmed, customers now have the long-term responsibility to issue invoices for each transaction until the contract expires. The self-billing invoice must contain the name, address and VAT identification number of the supplier. In addition, the declaration «The VAT indicated is your tax due to HMRC» must be included in each invoice.
Learn how customers and their suppliers need to manage VAT when using self-billing agreements in VAT Notice 700/62. Self-billing contracts usually have a duration of 12 months. Ultimately, you will need to review the agreement to ensure that you can prove to HMRC that your supplier agrees to accept invoices you issue on their behalf on a self-billing basis. It is very important that you do not charge a supplier yourself if you do not have written consent to do so. There are several scenarios in which it may be useful to enter into a self-billing agreement with a supplier: the terms of the agreement are a matter between you and your customer, but there are certain conditions that you both need to meet to ensure that you comply with VAT regulations. If a company wishes to enter into a self-billing agreement, it does not need to inform HMRC or obtain its approval, but it must obtain from its supplier or customer that it accepts the agreement and meets certain conditions. All self-invoiced invoices must include the receipt «Vat shown is your outgoing tax due to HMRC». . .